KAMAZ is under US sanctions

The US Treasury imposed blocking sanctions against KAMAZ - on June 28, OFAC included the concern, its head Sergey Kogogin, as well as subsidiaries of the leasing company of the same name, NEFAZ (50.01%) and Tutaevsky Motor Plant (TMZ; 64.43%) in the SDN-list. At the same time, the US Treasury allowed transactions with NEFAZ and TMZ for agricultural equipment until December 22, 2022. KAMAZ is the leader in terms of sanctions in the Russian automotive industry - already under the sanctions of Australia, Canada, the EU, New Zealand, Switzerland and the UK. Before that, only Oleg Deripaska's GAZ Group was included in the SDN-list from the industry. Unlike EU sanctions, US restrictions have extraterritorial application. Also on June 28, the state corporation Rostech entered the SDN-list, which has 47.1% in KAMAZ (other 23.54% belongs to Avtoinvest LLC, 15% belongs to the German Daimler AG).

As follows from the OFAC report, KAMAZ is included in the SDN-list due to the fact that its equipment was seen when the Russian military moved through the territory of Ukraine, and trucks of the brand, presumably belonging to the Russian military, were seen in Belarus with Iskander missiles. According to Ekaterina Orlova, the head of legal practice at Grace Consulting Ltd, the reasons for imposing sanctions, which were indicated by the US Treasury, will become an additional difficulty for exports due to reputational costs. As a result, KAMAZ, which accounts for about 10% of its revenue from foreign markets, is unlikely to be able to keep exports at the same level and will have to rely mainly on the domestic market. In addition, Chinese companies are very cautious when it comes to setting up JVs with sanctioned persons, as, due to active US pressure, Chinese banks are trying not to make payments to entities that could potentially become targets of secondary sanctions in order not to fall under them themselves.

Thus, US sanctions may make it difficult for KAMAZ to access imported components even from the remaining Chinese partners. Meanwhile, KAMAZ entered the light commercial vehicle market last year with the Compass model, created under license from China's JAC. This Chinese automaker was also named among the possible "donors" for "Moskvich" (the former Renault plant in Moscow), KAMAZ was supposed to become a production partner of the project.